The CFPB recently announced that it is launching an inquiry into the challenges consumers face in finding and securely sharing access to their financial records with different financial firms. The inquiry marks the CFPB’s first foray into the area of consumer-permissioned access to digital financial account information.
With the growth of electronic consumer financial account data, when consumers grant third parties permission to access their digital financial records, financial firms can gain a large amount of insight around consumers’ spending habits, monitor relationships with multiple financial institutions from one place and even use the information to underwrite loans or lines of credit. Consumers can also use new websites and apps, and personal account aggregators like Mint to access their financial information for budget analysis and advice, motivational savings, financial product recommendations, investment management, and other services. However, the sharing of consumer financial information among third-party companies comes with risks to consumers’ privacy and account security. It also imposes financial burdens and risks to financial institutions.
It is in this context that the CFPB released a 20-page notice and request for information seeking public comment to better understand the consumer benefits and risks associated with technological developments that rely on access to consumer financial accounts and related information.
Among the issues the CFPB’s inquiry cover are:
- Consumer Choice: Can consumers access their own digital financial records and permit others to use that information for their own benefit? What burdens does such use of financial records place on financial institutions?
- Consumer Security: What options do consumers have to ensure that their financial records are obtained, stored and used securely?
- Consumer Control: When consumers grant access to third parties, what type of control will they have over how their records will be accessed and used by these parties? For example, will consumers be able to request that their records be deleted?
According to the CFPB’s announcement, the agency hopes that the information obtained in response to the request will assist the industry develop best practices to deliver benefits to consumers, address consumer protections and safeguards, and spur innovation.
Comments must be received on or before February 21, 2017.
The CFPB announcement can be found here: http://www.consumerfinance.gov/about-us/newsroom/cfpb-launches-inquiry-challenges-consumers-face-using-and-securely-sharing-access-their-digital-financial-records.